Question: 2.The following problem is loosely based on an actual project at Mother Earth OrganicMushrooms, a Pennsylvania-based company. The company is considering acquiring a new automatic
2.The following problem is loosely based on an actual project at Mother Earth OrganicMushrooms, a Pennsylvania-based company. The company is considering acquiring a new automatic packaging and labeling line for its packingfacility. Two different models with varying features, O&M costs, and salvage values areconsidered. The following table provides the summary financial information for the twoalternatives. The company's MARR is 15%. Net Cash Flow EOY Model 1 Model 2 0 -$10,000 -$20,000 1 $5,500 0 2 $5,500 0 3 $5,500 $40,000 IRR 30% ? PW(15%) ? $6,301 a)Compute the IRR for Model 2. b)Compute the NPW for Model 1. c)Based on the NPW, which model should the company select? d)Confirm your answer in part (c) by comparing the two alternatives using the IRR
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